Bitcoin Forum

I realize that asking folks to peer into the murky future is inviting a lot of wild speculation.  However, speculation about future event possibilities can sometimes spark innovative ideas.  At the risk of drowning in a sea of ridicule, I ask these questions:

1.   What will all of the monster hashing machines do after the last coin is mined?
2.   What will the peer-to-peer network be doing?
3.   What are the large holders going to do with their massive collections of BTC?

Looking forward to some interesting ideas.

/Frank

By this time there will be sufficient transaction volumes to provide miners with a greater income derived from mining fees over new block rewards.

By 2140 when the last of the 21 million are mined, the entire 21 million will be distributed amongst millions of people (only if mass adoption occurs).

Nothing will change in short. There will be less mining though and Bitcoin will be supported only with tx fees, however BTC will continue to function and be used.
The mining machines will still be useful for getting these fees and securing the network however. Mining will likely be very professional and centralized by then.

If you believe that the Pareto principle will apply to bitcoin, then 80% of the total 21 millions will be controlled by 20% of all holders.  That leaves open the question of what this 20% intend to do with their holdings.


The supposition that transaction fees will be a substantial inducement to continue running hashing machines is interesting.  There seems to be an assumption that there will be a sufficient number of transactions to support the system.  I don’t have a clue about the basis of these assumptions, so please educate me.

/Frank

The last coin will never be mined (see also (https://bitcointalk.org/index.php?topic=173145.msg1801962#msg1801962)).

But even if it would, mining would still continue as normal, as new blocks would still be mined. They just wouldn't generate any new bitcoins, but it will remain profitable for people to keep mining nonetheless, for the transaction fees.
In fact, long before this last coin would be mined (which is never, but for argument's sake) the block reward (i.e. generation of new bitcoins) is already becoming insignificant compared to the transaction fees.

Same as now.

Same as now. And same as large holders of massive collections of Euros, Dollars or gold.. Live in wealth, and spend it on hookers and coke, I suppose.

Number of Transactions:
http://blockchain.info/charts/n-transactions?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

Transaction Fees:
http://blockchain.info/charts/transaction-fees?timespan=all&showDataPoints=false&daysAverageString=1&show_header=true&scale=0&address=

everyone already answered your question, but:

transactions, transactions, transactions

How about a different question. How many transactions can Bitcoin support before wrapping back to 0?

Restate question?

Besides, IDGAF.

They are not indexed by integers, but by the transaction id, which has enough bits for everyone on earth to send everyone on earth 1 bitcoin 21,000,000 times.... and then do it over again 1.1252x10^50 times.

I can see this thread quickly degrading down into yet another block size one…

Any speculation as to what the rules for transaction fees will look like?

Infinite.

Thanks for the links.  The charts are interesting but still don't give me a basis for establishing a future of transaction fees. 

For example, suppose that most of the transactions that are happening right now are directly related to individuals using BTC to purchase mining equipment.  I don't know if this is a valid assumption but if it is then the number of transactions will decrease substantially once the demand for equipment eases.  If the number of transactions decreases will not the fees decrease?

/Frank

Transaction fees will support the small amount of miners

I think mining will stop but transactions will continue.
Not sure

Oh, I hope not.  I'm really interested in the speculations.  Someone surely has more than just hope and trust.

/Frank

You can never get all the details correct.  You'll just end up stacking guesses on guesses.

However, it doesn't really matter since the stable point is where fees just barely cover expenses for miners.  The most efficient will profit slightly and the rest will lose.  The network will adjust to make sure this is how it plays out once we get past ASIC adoption.

At the moment, most of the transactions are gambling.

lets talk about this in 100 years   :D

;D ;D ;D

IMO, after just another 2 reward halving, when block reward drop to 6.25 coins per block, the transaction fee will reach 6 coins per block

With 1MB block size limit, the maximum transaction a block can handle is about 2000 transactions, if each transaction charge 0.003 coins fee, that will be 6 coins per block

However, all the small transactions less than 0.3 coins will have a large transaction fee, so I guess that small transactions will be handled by some off-chain clearing solution

Everyone on this forum needs to read up on rapidly-adjusted-payment transactions as I did a few days back. Entirely eliminates the need for off chain solutions:
https://en.bitcoin.it/wiki/Contracts

As for why fees will go up:
Its an economic equilibrium - if mining goes to zero anyone can mess with the blockchain and the BTC users stand to loose much value. If mining fees go to the moon the BTC economy will be inefficient and just waste CPU.
So basically => mining fees=risk-of-attack*damage-from-attack => Fee=Risk*Cost.

Since it will not take that much mining to make most attacks near impossible future total costs of the Bitcoin system will likely be extremely low. Keep in mind that mining can effectively be ZERO until you come under attack at which point you can scale it up, thus minimizing average cost.
The current block reward is largely an encouragement to waste resources and is only justified in its necessity to create Bitcoin in the first place.

It would have been more economically sound if Satoshi had simply distributed the 21 million BTC, but that has other issues and would not have incentivised the construction of the Bitcoin system in the same way.

Probably a new and better coin(ish) will emerge. Eventually bitcoin will be whiped out and extinct before the last bitcoin could be minted I think. Just like what happened to Kodak.

Have you seen the industralization from 1900 to 2013 ?

What do you expect up to 2140 when the last Bitcoin is expected? You must be naive to think Bitcoin last that long.

We would be having lightspeed transistors and the new currency is Time.

I doubt it.. We still burn fossil fuels due to Market Control / Capitalism... I think it's going to be a much slower roll-out than that.

Remember what happened 100 years ago when Tesla wanted to give everyone Free electricity? - Westinghouse dropped his funding because he couldn't work out a way to make money off it...

I'm not sure why you are concerned about what is going to happen to bitcoin more than 100 years from now.


I'm not sure why you think "that most of the transactions that are happening right now are directly related to individuals using BTC to purchase mining equipment", and I certainly can't understand why you would think that would still be true 100 years from now.

Regardless, I'll play along...

So we get to block number 6,930,000 somewhere around 120 years from now.  Suddenly the block subsidy drops from 0.00000001 BTC to 0 BTC.  At this point, for some reason, the number of transactions drops off and less people pay less in transaction fees.  Some miners find that the costs of running their equipment is greater than the revenue they generate.  Some miners shut off their equipment.

This causes the difficulty to drop within the next 2016 blocks.  The reduced difficulty means the remaining miners mine more blocks for themselves without having to increase their costs.  This brings them closer to profitability as they will get a larger percentage of the transaction fees that are being paid.

If there are still some miners loosing money by running their equipment, they too will shut their equipment off.  This will reduce the difficulty even more, bringing the remaining miners even closer to profitability.

This cycle repeats over and over until eventually, enough miners have shut off their equipment to allow the remaining miners to be profitable from the percentage of the transaction fees that they receive.  These miners will continue mining, and the rest of the bitcoin network will continue to function.

Seeing that the network has stabilized, people who are holding bitcoins will look far ways to make use of the value that they hold.  This will result in new sources of transactions.  The increase in transaction leads to an increase in fees.  Now mining is becoming more profitable for those who are still mining.  This provides an
incentive for additional people to acquire mining equipment and start mining.  The increase in mining results in an increase in difficulty.

As you can see, mining will react to whatever is occurring with transactions.  As transactions (and transaction fees) increase, the total amount of mining will increase.  As transactions (and transaction fees) decrease the total amount of mining will decrease.  Eventually the mining reaches an equilibrium with the transaction load at that time.

Thanks Danny.  I really didn't formulate my question correctly (blame it on extreme noobness), but your long answer was exactly what I wanted to learn.

Since I made the original post, I have seen the large number of gambling transactions being posted.  I speculate that those numbers are the largest number of transactions but not necessarily the largest in BTC volume.

I note that all we can do is speculate about what is being spent on whatever.  Unless there is insider knowledge, of course.

Thanks again,

/Frank

Transaction fees will support the miners

http://www.cryptocoinsnews.com/2013/09/25/happens-last-bitcoin-mined/